Section 12 -Time of Supply of Goods Under Revised GST Law

The provisions relating to determination of time for supply of goods has been significantly amended and is discussed in detail as follows:-

1. The time of supply of goods shall be earliest of the following:-

The date of issue of invoice by the supplier or the last date on which he is required under section 28, to issue invoice with respect to the supply; or

The date on which the supplier receives the payment with respect to the supply.

Provided that where the supplier of taxable goods receives an amount upto one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess, shall at the option of the said supplier, be the date of issue of invoice.

It is also clarified that ‘the date on which the supplier receives the payment’ shall be the date on which the payment is entered in his books of accounts or the date on which the payment is credited to his bank account, whichever is earlier.

The revised provisions are much better version of the old GST law. Under the earlier GST law, the time of supply of goods was earliest of 4 parameters being- date of removal of goods, date of issuance of invoice by the supplier, date of receipt of payment or date of which recipient shows receipt of goods in his books of accounts. It was represented that the date on which recipient shows receipt of goods in his books of accounts is a parameter that is practically impossible to comply with and we are delighted that the said provision has been deleted. But the tax payment on advance receipt of payment in case of goods has been prescribed which is not applicable in current Excise regime. The Central Excise duty is to be paid on removal of goods only and invoice is to be issued at the time of removal.

2. The old draft of GST Law also provided specific provision for continuous supply of goods but there is no such provision in the revised GST Law. This means that the general provision given under section 12(2) would apply.

3. A new concept of payment of tax under reverse charge for supply of goods has been introduced in the GST regime. According to the revised provision, the time of supply of goods under reverse charge shall be earliest of the following:-

The date of receipt of goods; or

The date on which payment is made; or

The date immediately following thirty days from the date of issue of invoice by the supplier.

If it is not possible to determine time of supply on the basis of above parameters, the time of supply shall be the date of entry in the books of account of the recipient of supply.

4. The provision specifying time of supply in case of goods sent on approval basis has been deleted thereby meaning that the general provisions contained in section 12(2) as discussed in point no. 1 will apply. Earlier, the time of supply in case of sale on approval basis was date of approval or six months from date of removal, whichever is earlier. However, as per revised law, it is date of issue of invoice/last date for issue of invoice or date of receipt of payment, whichever is earlier. The new provision seeks to take away the prolonged period of 6 months for making payment of tax.

5. A new provision specifying time of supply in case of vouchers has been introduced. The time of supply of voucher shall be the date of issue of voucher, if supply is identifiable at that time or date of redemption of voucher, in all other cases. This provision has been incorporated keeping in mind the increasing trend of vouchers given on online purchasing. If the vouchers are valid for a particular period of time, then the date of redemption of voucher will be the time of supply.

6. In case it is not possible to determine the time of supply under provisions as stated above, the time of supply shall be ascertained as follows:-

In case where periodical return is to be filed, date on which such return is to be filed, or

In any other case, be the date on which the CGST/SGST is paid.

The above provision is a residuary provision for specifying time of supply.